FOR what it is, Proton’s new Persona is impressive.

Backed into a corner and buckling under financial strain, Proton has been able to roll out a car that looks good and is safe and affordable.

Starting at RM46,800 for a 1.6 litre engine, there is little doubt that the Persona will sell. The million-dollar question is, will it sell well enough to make a difference to Proton?

“If we can sell 3,000 to 4,000 units a month, we will be able to recover our costs,” CEO Datuk Ahmad Fuaad Mohd Kenali tells the press at the launch of the car.

These numbers might not seem particularly ambitious but Proton cannot afford to fall short. It would still take two to three years to recover the R&D cost if these sales targets are achieved, says Fuaad.

This is hardly comforting, considering the R&D cost for the Persona is relatively low. After all, it is basically the sedan version of the Iriz — they use the same platform and engine.

Keep in mind that Proton incurred nearly RM1.5 billion in losses last year, pushing its parent DRB-Hicom Bhd into the red.

While Fuaad would not talk about the Persona’s margin, industry players say it is razor-thin. Intense competition, coupled with an incredibly soft car market, simply do not give Proton much room to manoeuvre when it comes to pricing.

But Proton is not banking on the Persona alone. Next month, it is expected to launch the new Saga. Fuaad hopes both these models will help boost the national automaker’s sales to around 12,000 units a month. For perspective, Proton only sold 3,866 cars in July and has averaged 5,656 units a month this year.

The trouble is, producing a good car has not been enough for Proton.

“If there were any other badge on the car [Persona], there would be no trouble selling it, even at a higher price,” laments an industry executive.

“Proton’s job now isn’t to make big profits but to rebuild its brand equity. There is still some goodwill for Proton among Malaysians since it is the national car. It needs to build on that and restore confidence in the brand. It cannot afford any mistakes.”

Selling the Saga, however, will be a big challenge for Proton as it will have to go head-to-head with Perodua’s newly launched sedan, the Bezza.

The last time Proton and Perodua clashed, it did not go well for Proton. The Iriz, despite ticking all the boxes, could not compete with the MyVi and sales never met the targets.

Proton may well have to compete heavily on price when it comes to the new Saga.

On the other hand, the Persona sits in a sweet spot. The premium variant costs RM59,800, keeping the car reasonably affordable compared with the foreign marques in the segment. The only real competition in this price range is the MyVi but as a sedan, the Persona should be able to carve out a niche for itself.

On top of that, Perodua is highly unlikely to produce a sedan with a larger engine displacement to compete directly with the Persona. Toyota, which now wholly controls Perodua’s technology partner, Daihatsu, would not want Perodua to cannibalise the sales of its B-segment cars like the Vios.

Still, the weak automotive market will not make things easy for Proton. Total industry volume is projected to drop 13% this year to 580,000 units when Proton sorely needs to move high volumes. In this environment, most automakers are facing a challenging market and obviously pulling out all the stops to get sales.

Against this backdrop, it falls on Proton to prove itself and the stakes are high. The government may have extended Proton a soft loan but that money is only going to cover its outstanding payables.

On a more positive note, if Proton can hit its sales targets for its new line-up, it would definitely strengthen its position at the negotiation table as it seeks a foreign strategic partner to help turn it around.

The good news is, the reviews for the Persona have been positive so far, which gives Proton some hope in a difficult market. 

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